Claims that British soldiers unlawfully killed Iraqi civilians have been dropped after lawyers representing their alleged victims' families admitted to a public inquiry today there was no evidence it happened.

Public Interest Lawyers told the Al-Sweady Inquiry its clients will no longer claim their relatives were killed by soldiers while in custody following the Battle of Danny Boy in May 2004.

It came after more than a year of evidence from almost 300 witnesses at the hearing in central London, at a cost of more than £22 million.

The inquiry was examining allegations that 20 or more Iraqis were unlawfully killed at Camp Abu Naji (CAN) near Majar-al-Kabir on May 14 and 15 2004, and detainees were ill-treated there and later at Shaibah Logistics Base.

The inquiry heard today that PIL and its clients had changed their mind because of "detailed material" which came out in evidence over the last year.

But it still intends to contest the claims regarding mistreatment of prisoners, it said.

John Dickinson, lead solicitor for PIL, said in a statement: "From the outset the families have had the simple objective of discovering the extent of any wrongdoing and, if so, how it came about and who was responsible.

"It is accepted that, on the material which has been disclosed to date, there is insufficient evidence to support a finding of unlawful killing in Camp Abu Naji."

The inquiry is named after Hamid Al-Sweady, a 19-year-old student whose father Mizal Karim Al-Sweady claimed he was murdered after being detained by British troops.

Mr Al-Sweady was the first of 15 witnesses who travelled to the UK for the inquiry last year.

In evidence he said injuries suffered by Hamid appeared to include signs of torture.

But he also changed some of his claims, including saying he saw just one body with eyes missing and one with a broken nose, having said in a statement that he has seen several.

The inquiry also heard there were discrepancies between statements Mr Al-Sweady gave to Iraqi Police, the Royal Military Police (RMP) and the inquiry itself.

The MoD has vigorously denied the claims that soldiers killed prisoners, saying any deaths occurred on the battlefield.

Today was the last full day of witness evidence.

Since March 4 last year the inquiry has sat for 167 days over 42 weeks and heard evidence from 281 witnesses.

It included eight weeks interviewing 40 Iraqis at a specially-made studio abroad. A further 21 military witnesses also gave their evidence via video-link from various countries.

PIL's barrister Patrick O'Connor told the inquiry today that it accepted, based on the evidence, that no one was killed at the bases.

He said: "We emphasise that we're dependent upon the material currently disclosed by the Inquiry.

"That material is incomplete, as everyone recognises, and may not reveal the full story.

"This position is limited to the issue of deaths at Camp Abu Naji.

"It is not intended in any way to concede that any of the deceased were, in fact, lawfully killed.

"Unlawful killings may well have occurred on the battlefield or elsewhere outside the base camp.

"That issue has not been fully investigated as part of this inquiry."

Inquiry chairman Sir Thayne Forbes is due to release his final report in November.

He told Mr O'Connor that he recognised the "courage" required to make the admission, adding:: "I do recognise that this statement is of very considerable significance and of great importance to the future progress of this inquiry."

An MoD spokeswoman said: "We have long said that there was no credible evidence for these allegations and are pleased that they have been withdrawn."